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We cannot balance the state budget solely with funding cuts. New revenues are needed to avoid devastating cuts to human services, education and health care.

March 29, 2017

Dear NASW Member,

The state of Connecticut and the Connecticut General Assembly cannot afford another year of major cuts to state spending and neglect new revenue sources. A majority of these spending cuts disproportionally affect low-income workers, residents, and children in the state. Connecticut’s fiscal crisis can be partially attributed to three limitations to state revenue including…

Decreased income tax collections on corporate profits

Decreased sales tax revenue

An inequitable tax rate for low income taxpayers.

In the past, Social Workers have focused mostly on the appropriations of funds. However, we need to look into innovative revenue means and encourage the Finance, Revenue, and Bonding Committee to do the same. The NASW-CT needs you to contact your state legislators and let them know that we need to explore new revenue measures to avoid massive spending cuts that will disproportionately negatively affect low-income marginalized individuals and moderate income households.

The Governors revenue proposal includes many items that the legislature will not accept and they will need to make up the difference. From highway tolls, expansion of sales taxes, to raising taxes on the top earners, there are a variety of revenue sources that can help the state make up the deficit.

Please contact your legislator (visit https://www.cga.ct.gov/asp/menu/cgafindleg.asp to find your legislators) and let them know you are a social worker and support increasing revenue in Connecticut. Please find below a sample message for your legislator.

Dear Legislator,

My name is …. And I live in your district. I am very concerned about the proposed budget cuts which will be detrimental to much needed services and programs to low-income individuals and moderate income households in our state. As a social worker I have seen firsthand how years of budget cuts has negatively affected the wellbeing of our state’s most vulnerable citizens. (Add examples of affected services in your community if you have them). I am asking you to explore new revenue sources so we can prevent cutting millions from much needed programs like Medicaid and mental health. [If you feel comfortable include a couple of the possible revenue sources listed below]. It is time to stop cutting and start raising funds to lift our state out of this terrible financial situation.

Thank you for your time and consideration,

Your Name

Below are some potential revenue sources

Apply sales tax to services- $730 million – $1.5 Billion

Collect a larger share of taxes due on internet sales- $65-$75 million

Apply the sales tax to digital downloads- $7-$11 million

Increase personal income tax by a half percentage point for top earners- $217.3 million

Higher rates on dividends and capital gains- $141.8 million

Repatriation of deferred management fees – TBD

Hedge funds avoided paying taxes on management fees since 2009, in 2017 this deferred income earned in Connecticut is now taxable according to the Internal Revenue Code

Join regional compact to close carried interest loophole- $535 million

Incomes gained through “incentive fees” are taxed at a rate 20% lower than income. This tax code loophole must be corrected to collect a reasonable rate on incentive fees.

Improve enforcement of existing tax laws- $40 million

Adopt throwback rule to eliminate nowhere income- $12-$25 million

The amount of money Connecticut companies should be taxed in corporate income in states that do not collect a portion of this tax will be will be collected by Connecticut.

Eliminate the corporate income tax capital base system and replace with a value-added tax as an alternative minimum tax- TBD

Tax a product at each stage of its development, more accurate measure of the value of the good

Renew efforts to regularly review business tax breaks- TBD

Enact sweetened beverage tax- $85-$141 million

Institute a low-wage employer fee- $305 million

Only apply to companies with over 500 employees and companies only pay the penalty for those employees paid under $15/hour

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